Inside another week of peril for Thames Water while England drowns in raw sewage

They say a week is a long time in politics. Well, this week has been a long time in the politics of water. 

We ended last week with drought warnings and the government announcing plans to build nine new reservoirs by 2050. Great that they are trying to secure the supply of our most precious resource, but this plan is slightly undermined by the three billion litres of water lost every day through our crumbling pipes.

After decades of neglect by private water companies, 20% of all the water in the network never even reaches our taps. So, by my maths, if we don’t fix the pipes, that’s nearly two of those nine new reservoirs effectively collecting and processing water only to throw it away again. Good news fades fast with this government.

Read more:

• Raw sewage pumped into UK waterways for 4.7 million hours in 2024: ‘This will only get worse’
• Privatised greed has poisoned our rivers – it’s time to take our water back
• ‘Complete disaster’: Outrage as Thames Water reports huge spike in sewage spills… again

On Tuesday (10 June), we got the interim findings of what the government hailed as the ‘largest review of the water sector since privatisation’. The problem is the review was blocked from looking at the issue of privatisation itself. Sir John Cunliffe was told to exclude public ownership from the scope of his report, as the government has already decided it will be too expensive.

There is a slight snag with this logic. The £100bn public ownership price tag that Steve Reed loves to quote is from a report that was commissioned by the private water companies themselves. That figure has been widely debunked and even called ‘economically illiterate’ by leading economist professor Dieter Helm.

The terms of any shareholder compensation can effectively be dictated by the government of the day. In 2002 the Blair government paid just £500 million for the entire rail network when they nationalised the failing Railtrack. By parroting the water bosses’ dodgy figures, our environment secretary often sounds more like a PR man for the water companies and less like an objective public servant.

On the very same day as the Cunliffe report came out, the US equity firm KKR announced it was pulling out of a deal to buy Thames Water, dramatically increasing the chances of temporary nationalisation. KKR were apparently spooked by the potential for greater government oversight and having to actually pay those pesky fines Thames Water racked up for releasing raw sewage and paying unwarranted dividends. However, while it was still in the running to take over Thames Water, KKR made a ‘political investment’ to shore up its position, donating £27,000 to our chancellor Rachel Reeves. It’s not just the sewage that stinks in the murky world of privatised water.

Now the government is announcing a ban on failing water bosses’ bonuses. This is just fiddling while Rome burns, or more accurately fiddling while England drowns in raw sewage. Its nothing more than a token gesture and water bosses have already indicated they’ll just increase salaries instead.

The Water (Special Measures) Act along with the pointless Cunliffe review is an exercise in tinkering round the edges whilst still propping up Thatcher’s failed privatisation experiment.

If you’re banning bonuses for failing water bosses, you should be banning all shareholder payouts from failing water companies. If you follow this to its logical conclusion, you should be banning private companies from our water system entirely.

The government is worryingly out of step with the country and the world on this issue. Eighty-two percent of Brits want water in public ownership. Nine out of 10 countries run water in public ownership – because it works. In Scotland publicly owned water delivers cheaper bills (£113 per year cheaper) and more investment (£72 extra per household).

Public ownership saves us money and would quickly become a valuable revenue source for the public purse. Research by the University of Greenwich shows that public ownership could save us £3-5bn a year – even if shareholders are fully compensated.

Steve Reed could use his powers of special administration to take control of the failing water companies like Thames Water, slash their rotten debt and then take them into permanent public ownership. By ignoring this ready-made solution, the government has shown that it’s still wedded to Thatcher’s failed privatisation experiment.

By ignoring a viable solution to the water crisis, the government is continuing to side with the privatising profiteers while ignoring the people and the environment. And governments that ignore the people will often have a limited shelf life.

Cat Hobbs is the founder and director of We Own It, a charity calling for the nationalisation of resources.

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